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oregoncounsel
oregoncounsel, Attorney
Category: Business Law
Satisfied Customers: 16
Experience:  Oregon General Counsel, specializing in regional business & succession planning.
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We are 2 member LLC incorporated in state of Pennsylvania.

Customer Question

We are 2 member LLC incorporated in state of Pennsylvania. We are moving to state of Texas while one of the partners resigns and new one will join the Texas LLC. We would like to keep the EIN because of the existing contracts with suppliers and clients. What's the best way to handle this situation?
Submitted: 2 years ago.
Category: Business Law
Expert:  Dwayne B. replied 2 years ago.
Are you opening a new LLC in Texas? If so, why?
Customer: replied 2 years ago.
That's actually part of my question - not sure if we need to open new LLC in Texas or not. It would be easier if we didn't have to. What's the best way to handle this situation?
Expert:  Dwayne B. replied 2 years ago.
You can register your LLC as a foreign corporation doing business in Texas and that prevents you from having to go through the hassle of doing a new one. There is an article that discusses the concept at http://smallbiztrends.com/2011/07/operating-your-business-in-multiple-states.html and you would just have to contact the Texas Secretary of State and get the forms. That way you would keep your EIN.


If you would like any additional information or have more questions please don’t hesitate to ask but please do so my clicking on the Reply to Expert tab.

We work for Positive Ratings, please click on one of the top three ratings or one of the Smile Faces, as this would be appreciated. We have recently implemented a new rating and feedback system. Please be aware that you are rating my courtesy and service as a professional, and not necessarily whether you like the information that you are receiving. Please bear in mind I can’t control what the law is and whether it helps you, I can only tell you what it says, and I assume you want truthful information.

PLEASE DO NOT use the rating system to ask for more information or in an attempt to tell the website that you didn’t like the substance of the answer as it gives a NEGATIVE rating to me personally if your rating is one of the lower two.

I believe in giving information that is to the point, but please remember that I can only base our answers on the information you provide and sometimes a misunderstanding as to what you are looking for or already know occurs so feel free to ask additional questions or for clarifications. Be very careful about looking at other internet sites that just post generic information without any inquiry into your facts because often those answers are dated, wrong, or wrong as applied to your facts. Please be aware that my answer is not legal advice, it is merely information. You should always contact a local attorney for legal advice.

Several customers have asked how they direct a question to me in particular. If you specifically want me to provide information for you just put “FOR JD 1992” in the subject line and I will pick up the next time I am online.
Customer: replied 2 years ago.
What would happen with LLC in PA? We can't actually use the address in PA any longer because someone else moved into that location. How do we handle resignation of one member and new one joining the LLC?
Expert:  Dwayne B. replied 2 years ago.
You address the issue of new members in the corporate paperwork. I can't tell you how on here because that is "legal advice" but it isn't terribly hard. You can have the Secretary of State of PA be your registered agent in that state or hire one of the companies that do that. There is no requirement that you actually have a physical presence there.

The LLC just relocates to Texas, it is the same LLC and is still a PA corporation, it is just located in Texas.


If you would like any additional information or have more questions please don’t hesitate to ask but please do so my clicking on the Reply to Expert tab.

We work for Positive Ratings, please click on one of the top three ratings or one of the Smile Faces, as this would be appreciated. We have recently implemented a new rating and feedback system. Please be aware that you are rating my courtesy and service as a professional, and not necessarily whether you like the information that you are receiving. Please bear in mind I can’t control what the law is and whether it helps you, I can only tell you what it says, and I assume you want truthful information.

PLEASE DO NOT use the rating system to ask for more information or in an attempt to tell the website that you didn’t like the substance of the answer as it gives a NEGATIVE rating to me personally if your rating is one of the lower two.

I believe in giving information that is to the point, but please remember that I can only base our answers on the information you provide and sometimes a misunderstanding as to what you are looking for or already know occurs so feel free to ask additional questions or for clarifications. Be very careful about looking at other internet sites that just post generic information without any inquiry into your facts because often those answers are dated, wrong, or wrong as applied to your facts. Please be aware that my answer is not legal advice, it is merely information. You should always contact a local attorney for legal advice.

Several customers have asked how they direct a question to me in particular. If you specifically want me to provide information for you just put “FOR JD 1992” in the subject line and I will pick up the next time I am online.
Customer: replied 2 years ago.
If the LLC remains a PA corporation are here any tax implications? Do we need to report to PA state even if do not conduct any business there?
How do we handle resignation of one partner and new one joining the company at the same time?
Expert:  Dwayne B. replied 2 years ago.
There are no major tax implications as far as anything like having to pay taxes in both states or an increased amount of federal taxes.

PA does have some requirements each year to keep your LLC active.

I can't answer the question about how to handle the partner issues because it depends on how your paperwork is set up. You will need to sit down with the lawyer who did the paperwork there in PA and have them assist you. Sometimes it is as simple as the old partner signing a paper relinquishing his interest and the new partner signing a paper assuming it. However, it can be more complicated depending on how the LLC was constructed and the rules set in place in the incorporation documents.


If you would like any additional information or have more questions please don’t hesitate to ask but please do so my clicking on the Reply to Expert tab.

We work for Positive Ratings, please click on one of the top three ratings or one of the Smile Faces, as this would be appreciated. We have recently implemented a new rating and feedback system. Please be aware that you are rating my courtesy and service as a professional, and not necessarily whether you like the information that you are receiving. Please bear in mind I can’t control what the law is and whether it helps you, I can only tell you what it says, and I assume you want truthful information.

PLEASE DO NOT use the rating system to ask for more information or in an attempt to tell the website that you didn’t like the substance of the answer as it gives a NEGATIVE rating to me personally if your rating is one of the lower two.

I believe in giving information that is to the point, but please remember that I can only base our answers on the information you provide and sometimes a misunderstanding as to what you are looking for or already know occurs so feel free to ask additional questions or for clarifications. Be very careful about looking at other internet sites that just post generic information without any inquiry into your facts because often those answers are dated, wrong, or wrong as applied to your facts. Please be aware that my answer is not legal advice, it is merely information. You should always contact a local attorney for legal advice.

Several customers have asked how they direct a question to me in particular. If you specifically want me to provide information for you just put “FOR JD 1992” in the subject line and I will pick up the next time I am online.
Customer: replied 2 years ago.
Is there another way of handling this situation? We would rather cut the ties in PA if we are not doing any business there.
Expert:  Dwayne B. replied 2 years ago.
You can create a new LLC in Texas but I don't find anything that lets you transfer an EIN to a completely different company.


If you would like any additional information or have more questions please don’t hesitate to ask but please do so my clicking on the Reply to Expert tab.

We work for Positive Ratings, please click on one of the top three ratings or one of the Smile Faces, as this would be appreciated. We have recently implemented a new rating and feedback system. Please be aware that you are rating my courtesy and service as a professional, and not necessarily whether you like the information that you are receiving. Please bear in mind I can’t control what the law is and whether it helps you, I can only tell you what it says, and I assume you want truthful information.

PLEASE DO NOT use the rating system to ask for more information or in an attempt to tell the website that you didn’t like the substance of the answer as it gives a NEGATIVE rating to me personally if your rating is one of the lower two.

I believe in giving information that is to the point, but please remember that I can only base our answers on the information you provide and sometimes a misunderstanding as to what you are looking for or already know occurs so feel free to ask additional questions or for clarifications. Be very careful about looking at other internet sites that just post generic information without any inquiry into your facts because often those answers are dated, wrong, or wrong as applied to your facts. Please be aware that my answer is not legal advice, it is merely information. You should always contact a local attorney for legal advice.

Several customers have asked how they direct a question to me in particular. If you specifically want me to provide information for you just put “FOR JD 1992” in the subject line and I will pick up the next time I am online.
Customer: replied 2 years ago.
That doesn't sound right, according to this article there is an option (#4 under LLC section) to do it differently but it doesn't say specifics: http://www.bizfilings.com/learn/moving-business.aspx
There are more articles like this one on the internet but I couldn't find more details...
Expert:  Dwayne B. replied 2 years ago.
If you are talking about forming a new one and "merging the old one" into it then it is theoretically possible but I have never seen it done in Texas and it is going to be the most expensive option of any we have talked about. There are also issues because you are trying to remove an entity from one state and turn it into an entity in another state. It also is making broad assumption that both states will allow that and, again, I have never seen it done in Texas and I've been involved in lots and lots of corporations.

As I mention in the disclaimer, beware of websites that offer general information like that one and particularly when you can't find anything to back it up and even more particularly when they are trying to get you to buy something.


If you would like any additional information or have more questions please don’t hesitate to ask but please do so my clicking on the Reply to Expert tab.

We work for Positive Ratings, please click on one of the top three ratings or one of the Smile Faces, as this would be appreciated. We have recently implemented a new rating and feedback system. Please be aware that you are rating my courtesy and service as a professional, and not necessarily whether you like the information that you are receiving. Please bear in mind I can’t control what the law is and whether it helps you, I can only tell you what it says, and I assume you want truthful information.

PLEASE DO NOT use the rating system to ask for more information or in an attempt to tell the website that you didn’t like the substance of the answer as it gives a NEGATIVE rating to me personally if your rating is one of the lower two.

I believe in giving information that is to the point, but please remember that I can only base our answers on the information you provide and sometimes a misunderstanding as to what you are looking for or already know occurs so feel free to ask additional questions or for clarifications. Be very careful about looking at other internet sites that just post generic information without any inquiry into your facts because often those answers are dated, wrong, or wrong as applied to your facts. Please be aware that my answer is not legal advice, it is merely information. You should always contact a local attorney for legal advice.

Several customers have asked how they direct a question to me in particular. If you specifically want me to provide information for you just put “FOR JD 1992” in the subject line and I will pick up the next time I am online.
Customer: replied 2 years ago.
It's my first time using this website so I don't know what exactly to expect but Im not much smarter after your answers which are kind of vague. You say it's most expensive option of any we talked about even though you said earlier there is only one option. How much more xpensive it is?
You pointed out there are issues with it but didn't mention any.... what kind of issues are we talking about?
Are you positive it can't be done in Texas or just guessing?
Why should we keep LLC in PA if we won't be doing any business whatsoever? Isn't it a hassle to file the taxes with state where you don't do any business?
Expert:  Dwayne B. replied 2 years ago.
I'm just going to opt out and let someone try and assist you, since I must not be making myself clear. No need to respond, someone else should be with you shortly.
Expert:  MDLaw replied 2 years ago.
I see that your previous expert has opted out. It appears that you are seeking specific advice and if you read the disclaimer on this page, we can't give out specific legal advice. It is against the rules. Therefore, it sounds like you will need to consult with a lawyer in your area who can give you advice specific to your situation.
Customer: replied 2 years ago.
I understand that but I was quite confused with the answers I got from the expert. First I was told there is only one option for me, then they admitted there is another option but weren't quite sure. If someone says there are issues with that option, it's not even general direction but very vague answer. They opted out after I asked what kind of issues so I'm assuming they were not knowledgeable of the topic...
Expert:  MDLaw replied 2 years ago.
The previous expert gave you a correct answer.
Customer: replied 2 years ago.
I don't think so.
Expert:  MDLaw replied 2 years ago.
I don't think anyone can help you then if you are convinced that the experts are wrong :) I too will opt out.
Customer: replied 2 years ago.
Not sure what to say, neither you nor your predecessor explained properly why their answer is the right one. In fact, you didn't say much at all except that first expert was right...
Expert:  oregoncounsel replied 2 years ago.

The best way to handle the situation is to start a new Texas LLC, get a new EIN, and don't worry about your suppliers and clients. They will understand. If any of them deal with companies on a regular basis, they won't mind at all. Is there a way to do it differently? Absolutely, but you asked for the best way. Here's why I say it's best this way:

1. EIN is issued by the IRS. Your EIN is linked to a company name, which (I presume) passes it's tax information along to the company owners. If you start a new company, you'll need a new EIN, period. If you have a complete change of ownership (which I know you're not planning on right now, but I will explain in a moment), then you'll likewise need a new EIN. If you want to keep the same EIN, you'll need to keep the same company and at least one of the same owners.

2. Keeping the same company means you'll need to either pay someone in Pennsylvania (to be your registered agent) or maintain an office there yourself. These are both pricey options if you ask me, so I don't think this is a good option. If you do decide to do this, there's another problem: you will have to pay both the State of PA and the State of TX whether you decide to start a second company or register the first to do business in TX. In my experience in TX, you're better off having a TX company than a northeastern company, but that's my own opinion based on business experience, not legal-related. Still, if you do decide to keep the PA company, and since you'd be paying in both states anyway, I'd suggest opening a TX LLC to be owned by the PA LLC. That way you could keep people paying the PA LLC with the same EIN. That is not a tax-beneficial setup, but again I don't recommend it anyway. If you were to do it the other way around (TX company owns PA company) then you'd need a new EIN anyway for the PA company, because it would have a new owner).

Again, as I said, the best option is just to let the PA LLC go, open a new Texas LLC, and get a new EIN for it.

Good luck and please feed positive feedback if you feel I've earned it.

oregoncounsel, Attorney
Category: Business Law
Satisfied Customers: 16
Experience: Oregon General Counsel, specializing in regional business & succession planning.
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